India seen holding rates as ’Goldilocks’ phase gives way to stress

try{ var _=i o; . if(!_||_&&typeof _==="object"&&_.expiry Iran sets new condition for Hormuz reopening, warns on Red Sea route Oil extends surge with focus on Trump’s deadline over Strait of Hormuz Trump sets 8:00 p.m. ET Tuesday deadline for Iran to reopen Strait of Hormuz Is the world running out of oil? Goldman Sachs weighs in (South Africa Philippines Nigeria) India seen holding rates as ’Goldilocks’ phase gives way to stress By Economy Published 04/06/2026, 01:15 AM Updated 04/06/2026, 01:18 AM India seen holding rates as ’Goldilocks’ phase gives way to stress 0 US Dollar Indian Rupee 0.51% IN10YT=RR -0.20% Indian Rupee US Dollar -0.50% By Jaspreet Kalra MUMBAI, April 6 - India’s central bank is expected to keep interest rates on hold on Wednesday as policymakers assess the fallout from the war in Iran, which threatens the South Asian economy and has battered its currency and bond markets. Instead, the focus is likely to be on calming financial markets, with assurances of readiness to support the weakening rupee and inject liquidity to keep bond yields in check, economists and traders said. All but two of 71 economists in a March 23–26 Reuters poll forecast the Reserve Bank of India would keep the benchmark repo rate unchanged at 5.25%. The RBI’s Monetary Policy Committee has cut rates by a cumulative 125 basis points in 2025 but paused at its February meeting. RBI Governor Sanjay Malhotra said in December that India’s economy was in a “Goldilocks” phase – combining strong growth with low inflation – giving the central bank room to keep policy loose for an extended period. That assessment has since been upended by the worst energy shock in decades. "If the energy shock lingers, the growth drag could outstrip the price shock, reminiscent of the COVID‑19 pandemic economy," said Pranjul Bhandari, chief India economist at HSBC, in an April 2 report. The combination of weaker growth and rising inflation argues for a "neutral policy" stance that neither stimulates no...